INTERMEDIATE MACROECONOMICS Essay Example | Topics and Well Written Essays - 500 words

INTERMEDIATE MACROECONOMICS - Essay Example Even though, restrictive policies are tools used to prevent or reverse inflation, they also reduce the aggregate demand. Tax-based policies employ tax incentives to encourage compliance with specified wage and price policies. The author then talks business cycles which allow the simultaneous pursuit of the steady price level and high employment policy objectives. Furthermore, the author indicates that the interest rate policies are determined by the macroeconomic coordination process in which a leniency in monetary policy can set off an MCP and lower interest rates, while expansionary fiscal policy can set off an MCP and raise interest rates. The chapter then discusses the data problems and policy delays which include the recognition lag, implementation lag and the impact lag associated with the implementation of different policies (Ashby, 2009). Chapter 11 Chapter 11 deals with international issues related to the macroeconomic environment through balance of payments, pegged rates an d domestic policy and flexible rate and domestic policy. The ratio domestic and foreign currency, in this case, dollar ($) and euro (â‚ ¬) is the exchange rate, that is, the international value of the dollar, stated as the euro cost of a dollar.